The Versarien PLC (LON: VRS) share price plunged 41.9% after announcing that it had raised £650,000 (before expenses) via placing 65,000,000 new ordinary shares in the capital of the Company for 1.0 pence per share.
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The decline in Versarien’s share price was expected, given the discount offered to the participating investors who purchased the new shares at 1.0p each, representing an over 40% discount to the company’s closing price on Thursday.
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The advanced materials engineering group said it would use the funds raised for working capital purposes and as bridge finance to extend the Company's cash runway ahead of any funds received from asset sales.
The company also noted that it did not need to seek shareholder approval before issuing the shares since it had already secured the approval at the general meeting of the Company’s shareholders held in July 2023.
Versarein reminded investors that it was working on selling some of its assets, including its mature businesses and the intellectual property and plant acquired from Hanwha Aerospace in 2020.
The company noted that it was in discussions with some interested parties doing their due diligence by reviewing the information in the data rooms. However, there is no timeline for a sale or the amount of cash the company will receive from such a sale.
Versarien also revealed that its directors, Chris Leigh, the Chief Financial Officer (CFO) and Stephen Hodge, the Chief Technology Officer (CTO), also participated in the capital raise by buying 1 million shares, each worth about £10,000. The two transactions were categorised as related party transactions.
Chris Leigh, Versarien’s Chief Financial Officer, commented: “Following the passing of the resolutions at the general meeting held earlier this month, the Board has decided that it would be prudent to raise further finance to assist in bridging to the proposed asset sales. We look forward to updating shareholders on continuing progress with the turnaround strategy in the coming months.”
Given the challenging situation the firm is facing, it is unclear whether Varsarien shares shall ever recover from today’s decline.
*This is not investment advice.
Versarien share price.
The Versarien share price plunged 41.9% to trade at 1.04p, from Thursday’s closing price of 1.79p.
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